User Account

All Pages

Calculate the expected value and volatility of the value

Assignment Help Finance Basics
Reference no: EM131441866

Question: There are three assets A, B and C in the economy. The expected returns on assets A, B and C are 8%, 10% and 15% respectively. The volatilities of returns on assets A, B and C are 25%, 23% and 40% respectively. The correlation between the returns on assets A and B is 50%. The return on asset C is not correlated (correlation is equal zero) with either return on asset A or B. The investor has wealth of $5,000. Consider a portfolio P of assets A, B and C with weights 20%, 35% and 45% respectively. a. Calculate the expected return and the volatility of (net) return on the portfolio. b. Calculate the expected value and volatility of the value of the portfolio. c. Suppose the investor invests one half of her wealth into a risk-free asset with return 5% and the second half into the portfolio P . Calculate the expected value and volatility of the value of this investment.

Reference no: EM131441866

Questions Cloud

Write a list of animal and its characteristics to a database : Write a list of animal and its characteristics to a database using JDBC. Display the characteristics of an animal when that animal is selected.
Standardize products and global marketing : "Cultures around the world are becoming increasingly similar, so companies should standardize both their products and global marketing efforts." Do you agree or disagree with this reasoning? Are there certain industries for which it might be more ..
Why is it important to automate os installation : Why is it important to automate OS installation? How does Kanban work? How does a ticket system improve our ability to track WIP? Compare and contrast a ticket system and Kanban.
Elements that affect strategy formulation : The elements that affect strategy formulation are the same whether a company is domestic or international. Do you agree or disagree with this statement? Why? Support your argument with examples.
Calculate the expected value and volatility of the value : There are three assets A, B and C in the economy. The expected returns on assets A, B and C are 8%, 10% and 15% respectively.
Describes the nature of the problem being identified : The first submission is a short proposal of 350-500 words which describes the nature of the problem being identified; what theories, tools and techniques are available to provide a business solution; and how the various parts of the business/ orga..
What is final number output for the given code snippet : What is the final number output for following code snippet? Which of following expressions is correct if you want to end a while loop when character variable keepgoingis anything other than character y in either uppercase or lowercase?
Compute the dividends over the specific time : Suppose that a firm's recent earnings per share and dividend per share are $2.20 and $1.20, respectively. Both are expected to grow at 10 percent.
Quick-build-product-service system or complex system process : l. Diagram a process for planning and cooking a family dinner. Does your pr resemble the generic product development process? Is cooking dinner analogous to a market-pull, technology-push, platform, process-intensive, customization, high-risk, quick-..

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd